There is a requirement in the sports industry for tracking its collectibles and memorabilia. The business of professional sports is estimated to be US$213 billion with the global market estimated to be a trillion dollars. The passion for professional sports has been labeled as “sporno”, a new societal obsession. This is the idea that sport and athletes are the new type of pornography. As a function of this obsession, the sports collectibles market has grown with this increased focus on professional sports and sports stars. The sport collectibles market is a significant portion of the annual $10 billion retail collectibles market in the U.S. The market serves approximately 50 million collectors in the United States. In the past sport memorabilia was purchased mostly at large trade shows or on a private sale basis. Today this sports memorabilia market is a part of mainstream online and retail venues.
The challenge with the sports memorabilia market, according to FBI statistics, is that at least 70% of all autographed sports memorabilia is fraudulent and an estimated one half billion dollars is lost annually to fake sports collectibles in the U.S. It is perhaps the largest caveat emptor market in the U.S. The field is ripe for counterfeit items due to the growing demand and limited supply of genuine collectibles.
The majority of counterfeit sports memorabilia distributed across the United States have been traced to a finite number of counterfeiters who have turned their trade into an art form in and of itself using the latest computing and printing technologies. These rogue operations supply a large volume of counterfeit memorabilia to large scale distributors of sports collectible. The distributors then pass this fake product to major retail outlets and other distributors. Ultimately the fake memorabilia is channeled to a variety of retail outlets and into the hands of unsuspecting collectors.
On top of this problem there is also a huge market in stolen collectibles and memorabilia. This has dampened the enthusiasm for what had been a rapidly growing pastime among rabid fans.
The FBI conducted an investigation of sports memorabilia fraud which has taken place since 1997. The investigation was dubbed Operation Bullpen. It involved the establishment of a fake company which traded in sports memorabilia. It helped identify forgers and dealers who were distributing fake items. The first phase of the probe led to 16 convictions in Southern California while the second phase resulted in an additional 40 arrests.
In a like manner, the Federal Bureau of Investigation has instituted an Art Theft Program. The FBI website states that art and cultural property crime—which includes theft, fraud, looting, and trafficking across state and international lines—is a looming criminal enterprise with estimated losses running as high as $6 billion annually. The Art Crime Team (“ACT”) of 12 Special Agents supported by three Special Trial Attorneys for prosecutions administers the National Stolen Art File. This is a computerized index of reported stolen art and cultural properties which are intended for the use of law enforcement agencies across the world. The FBI publishes a Top Ten Art Crimes list. Similarly, Interpol, the policing agency in Europe, publishes a list of Stolen Works of Art.
Stamp collections are another niche where huge rewards have been offered for return of stolen stamps. In one recent case $25 million was offered by an insurance company as a reward to any or all stamp dealers for providing information regarding specific items of philately which had been misappropriated.
Designer label clothing and accessories are the focus of major counterfeit entrepreneurs across the globe. However, there is a lack of legislation protecting the rights of fashion designers. Copyright laws for fashion designs do not exist as they do for artwork or trademark logos. Accordingly, the copying of design business is flourishing. For example, in Korea, during 2005, $162M of fake product was seized. China and Korea are the highest producers of fake goods. Among the $162M seized, the Chanel logo accounted for $23.5M. Other fashion lines seized were Rolex, Louis Vuitton and Nike. Those in the fashion industry attributed Chanel's leading position to its line of expensive handbags. Among different items, watches are the most vulnerable to replication with approximately $50.1M confiscated in 2005.
It is estimated that the fake goods market may reach $2 trillion by 2026. The Department of Commerce estimates the current counterfeit market in designer labels and accessories at $500 billion. Counterfeiting operations in countries like China and Brazil employ tens of thousands of people at manufacturing plants. They rival those of conglomerates like Sony. Their representatives visit trade shows where they acquire samples for the latest models to replicate. Sometimes the fakes are available in retail outlets before the genuine article.